Transcript PI Cover – 24.01.2014
Professional Indemnity Insurance & the Court Process An Overview
by Donal Twomey [email protected]
Tel : 021 4802700
PII – What is it?
• Profesisonal Indemnity Insurance is a type of liability insurance that provides cover for losses suffered as a consequence of a professional’s neglect, error or omission.
• PII Policies also cover the legal costs and expenses incurred in the defence of any claim .
PII – Key Points
• "Claims Made" Basis - it is the policy in force at the time the claim is notified which applies, irrespective of when the work was actually carried out or when the alleged act of negligence took place. • Example: You carry out work for a client in 2010. The client makes a claim against you in 2013 alleging negligence i.r.o. the work you carried out in 2010. In this case, it is your 2013 professional indemnity insurance policy that responds to the claim.
PII – Key Points
• ‘Run–Off Cover’? - clients can bring claims many years after services are complete (subject to the relevant limitation periods). As a result, retiring professionals often maintain a policy of insurance for up to six years after they retire.
• Proposal Form - duty to disclose any Claim(s) or Circumstance(s) that might give rise to a Claim.
Notification Conditions
• On-going duty to notify your Insurers expeditiously of a Claim or Circumstance as soon as you become aware of it - exact nature of your notification obligations will depend on the specific policy wording. • Insurers may decide not to provide cover for a claim if they find that reporting conditions were not complied with. • It is irrelevant that you might consider the threatened or intimated claim as spurious – the test is if the claim has been threatened or intimated. • IF IN DOUBT, NOTIFY!
Other Key Terms
• Limit of Indemnity - this is the cap on the amount that insurers will pay in the event of a claim. Is your Limit of Indemnity 'each and every claim' or is it 'in the aggregate'?
• Excess - is it 'each and every claim' or is it 'in the aggregate'? Is it inclusive or exclusive of Defence Costs?
What typically happens when a claim is made?
• Policyholder notifies his Insurer (or his broker) as quickly as possible. • Insurers appoint a solicitor to investigate the claim to see if it is covered by the Policyholder's Professional Indemnity insurance. • Policyholder will be requested to send project file to the solicitor and/or meet with the insurers' solicitor. • If cover is confirmed, the solicitor appointed by Policyholder's Insurers will come on record for the Policyholder in the defence/settlement of the Claim. • Policyholder has an on-going duty to co-operate with Insurers and their solicitors in the defence of the claim.
Jurisdiction
• District Court - claims for less than €6,384 (proposal to increase monetary jurisdiction to €15,000) • Circuit Court - claims for between €6,384 and €38,092 (proposal to increase monetary jurisdiction to €15,000 and €75,000) • High Court - claims for over €38,092 (proposal to increase monetary jurisdiction to over €75,000)